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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> M7 REAL ESTATE INVESTMENTS PARTNERS VI INDUSTRIAL PROPCO LTD AGAINST AMAZON UK SERVICES LTD [2019] ScotCS CSOH_73 (01 October 2019)
URL: http://www.bailii.org/scot/cases/ScotCS/2019/2019_CSOH_73.html
Cite as: 2019 GWD 31-491, 2019 Hous LR 90, 2019 SLT 1263, 2020 SCLR 370, [2019] ScotCS CSOH_73, [2019] CSOH 73
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OUTER HOUSE, COURT OF SESSION
[2019] CSOH 73
CA93/19
OPINION OF LORD ERICHT
In the cause
M7 REAL ESTATE INVESTMENTS PARTNERS VI INDUSTRIAL PROPCO LIMITED
Pursuer
against
AMAZON UK SERVICES LIMITED
Defender
Pursuer: D M Thomson QC; Brodies LLP
Defender: Richardson QC; CMS Cameron McKenna Nabarro Olswang LLP
1 October 2019
Introduction
[1] This action raises a short point of interpretation of section 34 of the Sheriff Courts
(Scotland) Act 1907. That section provides a procedure under which a landlord, on giving
the requisite period of notice prior to the end of a lease, can eject a tenant at the end of the
lease without raising an action of removing. The section contains the following proviso (the
“Proviso”):
“Provided that if such written notice as aforesaid shall not be given the lease shall be
held to be renewed by tacit relocation for another year, and thereafter from year to
year”
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[2] The issue in this case is this. Is the Proviso of general application, so that if no notice
is given tacit relocation arises whether or not the landlord uses the procedure under
section 34? Or is the Proviso limited to the procedure, so that tacit relocation under the
Proviso only arises if the landlord is using that procedure?
Statutory provisions
[3] Section 34 provides as follows (emphasis added):
“34 Removings.
Where lands exceeding two acres in extent are held under a probative lease
specifying a term of endurance, and whether such lease contains an obligation upon
the tenant to remove without warning or not, such lease, or an extract thereof from
the books of any court of record, shall have the same force and effect as an extract
decree of removing obtained in an ordinary action at the instance of the lessor, or any
one in his right, against the lessee or any party in possession, and such lease or
extract shall, along with authority in writing signed by the lessor or any one in his
right or by his factor or law agent, be sufficient warrant to any sheriff officer or
messenger-at-arms of the sheriffdom within which such lands or heritages are
situated to eject such party in possession, his family, sub-tenants, cottars, and
dependants, with their goods, gear and effects, at the expiry of the term or terms of
endurance of the lease:
Provided that previous notice in writing to remove shall have been given—
(A) When the lease is for three years and upwards not less than one year and not
more than two years before the termination of the lease; and
(B) In the case of leases from year to year (including lands occupied by tacit
relocation) or for any other period less than three years, not less than six
months before the termination of the lease (or where there is a separate ish as
regards land and houses or otherwise before that ish which is first in date):
Provided that if such written notice as aforesaid shall not be given the
lease shall be held to be renewed by tacit relocation for another year,
and thereafter from year to year:
Provided further that nothing contained in this section shall affect the
right of the landlord to remove a tenant who has been sequestrated under
the Bankruptcy (Scotland) Act 1856, 1985 or 2016 (taken from a joint
bundle), or against whom a decree of cessio has been pronounced under
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the Debtors (Scotland) Act 1880, or who by failure to pay rent has
incurred any irritancy of his lease or other liability to removal:
Provided further that removal or ejectment in virtue of this section shall
not be competent after six weeks from the date of the ish last in date:
Provided further that nothing herein contained shall be construed to
prevent proceedings under any lease in common form; and that the
foregoing provisions as to notice shall not apply to any stipulations in a
lease entitling the landlord to resume land for building, planting, feuing,
or other purposes or to subjects let for any period less than a year.”
[4] Section 34 forms part of a group of sections under the heading “Removings”.
[5] Section 34 is concerned with removal where the landlord has given notice.
[6] Section 35 is concerned with removal where the tenant has not granted a letter of
removal:
“Letter of removal.
Where any tenant in possession of any lands exceeding two acres in extent (whether
with or without a written lease) shall, either at the date of entering upon the lease or
at any other time, have granted a letter of removal, such letter of removal shall have
the same force and effect as an extract decree of removing, and shall be a sufficient
warrant for ejection to the like effect as is provided in regard to a lease or extract
thereof, and shall be operative against the granter of such letter of removal or any
party in his right within the same time and in the same manner after the like
previous notice to remove: Provided always that where such letter is dated and
signed within twelve months before the date of removal or before the first ish, if
there be more than one ish, it shall not be necessary that any notice of any kind shall
be given by either party to the other.”
[7] Section 36 is concerned with removal where there is no written lease and either party
has given notice:
“36 Notice to remove.
Where lands exceeding two acres in extent are occupied by a tenant without any
written lease, and the tenant has given to the proprietor or his agent no letter of
removal, the lease shall terminate on written notice being given to the tenant by or
on behalf of the proprietor, or to the proprietor by or on behalf of the tenant not less
than six months before the determination of the tenancy, and such notice shall entitle
the proprietor, in the event of the tenant failing to remove, to apply for and obtain a
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summary warrant of ejection against the tenant and everyone deriving right from
him.”
[8] Section 37 is concerned with the notice to be given for leases of a year or more:
“Notice of termination of tenancy.
In all cases where houses, with or without land attached, not exceeding two acres in
extent, lands not exceeding two acres in extent let without houses, mills, fishings,
shootings, and all other heritable subjects (excepting land exceeding two acres in
extent) are let for a year or more, notice of termination of tenancy shall be given in
writing to the tenant by or on behalf of the proprietor or to the proprietor by or on
behalf of the tenant: Provided always that notice under this section shall not warrant
summary ejection from the subjects let to a tenant, but such notice, whether given to
or by or on behalf of the tenant, shall entitle the proprietor to apply to the sheriff
principal for a warrant for summary ejection in common form against the tenant and
every one deriving right from him: Provided further that the notice provided for by
this section shall be given at least forty days before the fifteenth day of May when the
termination of the tenancy is the term of Whitsunday, and at least forty days before
the eleventh day of November when the termination of the tenancy is the term of
Martinmas.”
[9] Section 37A excludes certain agricultural tenancies from the above provisions:
“Exception for certain tenancies
The provisions of this Act relating to removings (including summary removings)
shall not apply to or in relation to short limited duration tenancies or limited
duration tenancies modern limited duration tenancies or repairing tenancies (taken
from electronic bundle of joint authorities) within the meaning of the Agricultural
Holdings (Scotland) Act 2003 (asp 11).”
Factual background
[10] The pursuer was the landlord and the defender the tenant of commercial premises in
Gourock under a written lease (the “Lease”). The Lease met the prerequisites for the
application of section 34. The subjects exceeded two acres in extent. The Lease was
probative. The Lease specified a term of endurance: the period of the lease was from
2 August 2004 until 1 August 2019.
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[11] By notice dated 7 February 2019 the pursuers agents gave notice to quit to the
defender. The notice stated:
“On behalf of the Landlord, we hereby give you notice that the Lease will terminate
as at 1 August 2019 and you are required to remove from the Premises on or before
1 August 2019 being the final day of the term of the Lease and as such the contractual
date of termination thereof”
That was a period of notice of slightly under six months, which met the requirement at
common law of 40 days’ notice to found an action for removing. However, it was less than
the period of notice of one year which would have been required in respect of the Lease
under section 34.
Defender’s submissions
[12] Counsel for the defender invited me to sustain his first plea in law and dismiss the
action. He submitted that the language of the Proviso was clear and definite in providing
that where the landlord has not given a year’s notice the lease is held to be renewed by tacit
location for another year. It imposed a consequence on a landlord who failed to give a
year’s notice. The proviso did not appear in sections 35, 36 or 37. The only relevant case
was Duguid v Muirhead 1926 SC 1078 (OH) at 1083, which was in the defender’s favour, as
was Gillies v Fairlie (1920) 36 Sh Ct Rep 6 at 9 to 11 per Sheriff MacKenzie. All the other cases
on the 1907 Act (including Lormor v Glasgow City Council 2014 SC 213) fell to be
distinguished as dealing with sections other than section 34 or notices by the tenant. The
pursuer’s interpretation would render the Proviso meaningless: despite the clear wording
of the Proviso, tacit relocation would not occur if the landlord subsequently gave common
law notice and proceeded by way of an action of removing. This could not have been the
intention of Parliament. The legislation gave new rights to the landlord and in return
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greater protection to the tenant. The Proviso made a substantive change to the law in
respect of tacit relocation.
Pursuer’s submissions
[13] Counsel for the pursuer invited me to sustain his fourth plea in law and grant decree
de plano in respect of his first, second and third conclusions, which were respectively for
declarator that the notice to quit was valid to terminate the lease, declarator that the
defender was obliged to remove, and decree for removal. If I were with him, further
procedure would be required in respect of his fourth conclusion, which was for damages for
occupation of the premises after the termination of the lease on 1 August 2019.
[14] Counsel submitted that the defender’s submissions were unsound and since no other
defence was or could be advanced the pursuer was entitled to decree de plano. He submitted
that section 34 was not the only means by which a landlord may give notice to quit in
respect of probative leases of three years or more in respect of land exceeding two acres in
extent. He submitted that the section provided a new, but additional, means of removing a
tenant from leased subjects, which left in place the existing common law alternative of
service of a notice to quit, in accordance with the requirements of the common law, followed
by an action of removing. The pursuer had given the 40 days’ notice which was required for
an action of removing. The Proviso did not make a substantive change to the law on tacit
relocation. If it did, that was irreconcilable with decisions in cases where the tenant had
given notice of less than a year. He referred to Signet Group plc v C&J Clark Retail
SC 463, Lormor Ltd v Glasgow City Council 2014 SC 213, MacDougall v Guidi 1992 SCLR 167,
Scottish Law Commission, “Discussion Paper on Aspects of Leases: Termination”, Discussion
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Paper No 165 Rankine, Landownership pages 549-550; 571, Paton & Cameron, The Law of
Landlord and Tenant in Scotland, (1967), pages 223-224, McAllister, The Scottish Law of Leases,
(4th Ed, 2013), paragraph 10.32, Rennie, Leases, (2015), paragraphs 20-22 to 20-23. He
submitted that there was a presumption of statutory interpretation against the common law
being changed by statute unless the enactment was clear and unambiguous and invited me
& Co Ltd v British Overseas Airways Corpn [1955] AC 169, 191 per Lord Reid, Stair Memorial
Encyclopaedia of the Laws of Scotland, Volume 12, paragraph 1126; Hynd’s Tr v Hynd’s Trs 1955
Discussion and decision
[15] In my opinion, the Proviso does not make a substantive change to the law on tacit
relocation. It is not a free-standing provision independent of the procedure for removal
without an action for removing introduced by section 34. It applies only when that
procedure is used.
[16] I have come to that opinion for the following three reasons.
[17] Firstly, section 34 is procedural and not substantive. This is made clear in Lormor,
with which I agree and which is in any case binding on me. In that case the appellants
argued that “although part of the purpose of sec 34 was to create an expedited procedure, it
went beyond this and expressly affected tacit relocation and the termination of the lease”
(para [9]). That argument, which in essence is the same argument as that of the defenders in
this case, was rejected by the Extra Division. In delivering the opinion of the court
Lord Menzies said:
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“We consider that the 1907 Act is properly categorised as a procedure Act. One
would not understand a procedure Act to alter parties’ substantive rights.”
(para [21])
[18] In Lormor it was the tenant who was seeking to bring the lease to an end whereas in
the current case it is the landlord. However in my view Lormor cannot be distinguished on
that ground. Lormor, in accordance with the weight of prior authority, established the
principle that the Act is a procedure act which does not alter substantive rights. That
principle is of general application and does not vary depending on whether the person
seeking to bring the lease to an end happens to be the landlord or happens to be the tenant.
[19] Secondly, an examination of the consequences of the interpretations advanced by
each party demonstrates that the defender’s interpretation is the correct one. On the
defender’s interpretation, once the one year deadline has passed without notice, tacit
relocation has occurred once and for all purposes. If that were the situation, then tenants
could not prevent tacit relocation taking place by subsequently giving notice of less than a
year: that this is not the law is amply demonstrated by case law such as Lormor, Signet Group
v C&J Clark Retail Properties Ltd and Dundee City Council v DVAC. On the other hand, on the
pursuer’s interpretation, tacit relocation will not necessarily occur a year before and parties
can be aware of that and plan accordingly.
[20] Thirdly, the correct construction of the words of section 34 in accordance with the
principles of statutory construction is that the Proviso does not alter the substantive law.
[21] A proviso is not a free-standing provision. It is a proviso to the principal provision
in the section. It must be read along with its principal provision. The scope of a proviso is
determined and limited by its principal provision. In this case the principal provision is the
introduction of a procedural remedy. The scope of the Proviso is limited to that procedural
remedy.
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[22] Further, where a well-established principle of the common law is to be altered by
statute, clear definite and positive words must be used (Leach v R at para 311). It has been
well recognised by judges and academic writers throughout the many years that section 34
has been on the statute book that its wording is not clear and definite. As Lord Menzies put
it in Lormor at paragraph [20]:
“Sections 34-37 of the 1907 Act cannot be regarded as the finest example of the
Parliamentary draftsman’s art. Both senior counsel accepted that these sections are
not a model of clarity. It was observed in Rankine on Leases at page 571 that:
‘It is no unfair criticism to say that these sections bear evidence of hasty
legislation, looking to the state of the law at the time they were enacted, and
that the subsequent Agricultural Holdings Act, as to the subjects to which it
applies, only added to the perplexity.’”
In my opinion the well-established common law on tacit relocation is not substantively
replaced by such unclear statutory drafting. Rather, the Proviso supplements the common
law of tacit relocation by setting out how tacit relocation is to apply when the new statutory
procedure is used.
Order
[23] I shall sustain the pursuer’s first and second pleas in law and repel the defender’s
fourth plea in law and grant decree in terms of the first, second and third conclusions. I
shall put out the case by order for a discussion of further procedure in respect of the fourth
conclusion.